Facebook has recently revealed that advertisers will soon no longer be able to optimize their budget at the ad set level. Instead, anyone who is currently advertising on the platform or plans to will have to manage their ad spend at the campaign level.
On the surface, this change may not seem like too big of a deal. But for anyone who has managed Facebook ads for a long time and values a large degree of control on how the platform serves their ad, this limitation will have a greater impact. Facebook has been expanding the use of its machine learning for some time, and with this change comes another win for the almighty algorithm.
But what does that mean for you and your accounts, really? In this post, I will walk you through what the change means for advertisers, why Facebook is making campaign budget optimization mandatory, the pros and cons of this move, and what it means for our industry.
Why make campaign budget optimization compulsory?
That was my immediate question following the news that was relayed to me by my Facebook representative. To provide some context, I manage a variety of clients within the B2B tech space and one of the most critical aspects to running successful ads for them comes down to lead quality. With often-times complex marketing funnels to maneuver, the demand for lead quality always comes down to one thing: control. The greater the amount of control the advertiser has, the greater their ability to manage the quality of acquisitions they produce. The trend towards automation of advertising platforms isn’t an area of concern for job security, but the effectiveness of advertising on these platforms may diminish over time if advertisers don’t learn how to work around or manage the changes.
When I began managing ads on Facebook circa 2014, the platform’s algorithm and machine learning were not the robust technology they are today. Marketers had to know the ins and outs of the platform and what tools they had at their disposal in order to optimize. Fast forward to 2020, and the tech giants Facebook and Google are continuing to advance and improve AI and machine learning, not only for automation’s sake, but for commercialization. Paid media is quickly diverging from its indie roots in favor of becoming the pop music of marketing.
In decades past, paid digital marketing platforms benefited from complexity. Inexperienced users would unknowingly hemorrhage ad budget because of features and optimizations they weren’t savvy enough to master. In order to run things efficiently, advertisers had to not only be knowledgeable, but also attentive—making active changes to campaigns, constant bid adjustments, and creative refreshes. Facebook started the shift towards machine learning with many of their campaign optimization models focusing more on automated bidding, with manual bidding in its previous form being less effective for the majority of advertisers.
Another reason for this shift towards automated processes comes from the fact that everyone and their mother wants to run ads on these platforms nowadays, so there’s increased competition. Increased competition means increased costs for advertisers. To combat this, a heavier emphasis on automation allows these platforms to show your ads to more people on more placements. Think audience expansion, for example. This gives Facebook the control to vaguely expand your audience, but as more experienced advertisers will know, not all ad placements are created equal. “Automatic placements” in Facebook is another area where they want you to trust their algorithm. The Audience Network greatly reduces costs, but the increased volume doesn’t always come with higher quality leads.
The pros and cons of campaign budget optimization
There are many pros to campaign budget optimization, but there are cons, as well. I’m not against the move, but I would much rather prefer it be an option and not a requirement. Either way, if you’re advertising on Facebook, you need to know what benefits and what drawbacks you can expect from CBO. Here they are.
Campaign budget optimization, or CBO, allows advertisers to manage ad spend and daily budgets at the campaign level. For many novice users, this might not seem all that important, but in practice it is. When you control budget at the campaign level, you hand the keys over to Facebook’s algorithm to decide which audiences (ad sets) receive a higher percentage of the spend. I’ve personally seen this strategy work brilliantly as volume of leads skyrocket and costs plummet.
Depending on the business, the conversion action, or just the general campaign objective, CBO can be extremely effective. That’s because Facebook’s machine learning and algorithms are actually pretty good—I’m not making the argument in this post that they are not. However, they are far away from being a free-thinking being with years of experience to make sometimes counter-intuitive decisions that will ultimately benefit a business’s specific goals.
The issues start rolling in when you want or need to have more control. For one client in particular, we are very focused on conversion rates down-funnel. The current method of audience optimization is to observe the MQL (marketing qualified lead) to Opp (sales opportunity) conversion rate. If an ad set is bringing in a high volume of leads for a low cost but those leads are not converting to opportunities, we’ll favor the costlier higher-quality leads from other ad sets.
The discrepancy between audiences is never 100% black and white, either. Some ad sets may only have a percentage point or fraction of a percentage point difference in MQL>Opp. The obvious counter argument would be to set the ad set conversion event optimization to “opportunities.” However:
- That isn’t possible when using Facebook lead ads.
- There are always going to be fewer opportunities than overall leads. Optimizing for the event that occurs far less will be detrimental to your ads serving.
- Anyone with Salesforce, Marketo, or Hubspot experience knows that optimizing for down-funnel metrics in-platform is like trying to invade Russia in the winter.
What mandatory campaign budget optimization means for you
I was told that CBO will become mandatory for all advertisers around late February 2020, so if it hasn’t affected your accounts, it’s coming soon. Here’s what you need to know to start preparing your accounts now.
Ad Set Limits: You can place spend limits on your ad sets. This will allow you to take back some control if you notice one ad set is receiving 90% of the daily spend and wish to spread that out to the others. This obviously isn’t ideal but certainly an option.
Account Restructure: If you rely heavily on the ability to control budgets at the ad set level, it may be time to rethink how you structure your ad account. This may possibly be the best option you have in order to maintain control. The drawback to this is that you will inevitably wind up with more active campaigns than you had previously. If you begin naming the campaigns after audiences rather than objectives or campaign type, your campaign tab will begin to look a lot like your ad set tab. This can become messy and confusing, as you may have different campaign objectives.
One thing remains unclear, and that is how the mandatory switch to CBO will be rolled out. I was told that it would go into effect in late February 2020, for instance, but have yet to see any changes to my clients’ campaigns. It’s possible that the mandatory switch may only take effect when creating new campaigns for a period of time. Although, if the combination of Facebook Power Editor and Ads Manager is any indication, Facebook will roll out the change immediately.
Acceptance: Life is all about dealing with disappointment. You’re never going to be a rock star and Facebook will no longer let you optimize budget at the ad set level (equal levels of disappointment in my mind). If you are not going to restructure your account, I suggest switching your current campaigns over to CBO as soon as possible so by the time the change becomes irreversible you will have an understanding of how it affects performance.
CBO: Bigger implications on PPC
My response to this change isn’t simply an overreaction to a minor detail, rather, it’s frustration with the trend that Facebook and Google are moving towards. The trend to take control away from advertisers is evident. With Google’s constant push for automated bid strategies and now Facebook’s budget optimization, it’s clear that these platforms want you to put faith in their algorithms. Despite the fact that these are good systems, I still believe that experienced users should have more controls on how their ads are being served and how their money (or client’s money) is being spent.
The flip side of this is that these platforms truly do have incentives for you to be successful—you can rest assured that they’re not disinterested in your financial gains.